Why Zero and First-Party Data Are the Future of Marketing
As digital advertising costs soar while targeting precision wanes, many businesses are rediscovering the power and value of owned marketing channels.
The online advertising landscape has changed. With targeting and tracking on the open web becoming harder thanks privacy concerns, and the aggressive advertising strategies of Chinese e-commerce giants Shein and Temu, costs have risen rapidly for advertisers.
With paid media’s ROI dwindling and privacy regulations tightening, brands leveraging direct data relationships are in pole position to future-proof their marketing strategy. The days of cheap, well targeted CPC’s are over, zero and first-party data is how smart brands build sustainable growth that can’t be destroyed overnight with an update of a tech giant’s algorithm.
What’s Zero-Party Data?
Zero-party data is information that customers intentionally and proactively share with your business. Unlike other data types, zero-party data comes directly from customers who willingly provide their preferences. This could include:
- Product preferences shared through quizzes or surveys
- Communication preferences selected in preference centers
- Personal interests disclosed during account creation
- Loyalty programme sign ups
The key distinction of zero-party data lies in its voluntary nature - customers are knowingly sharing information with you because they expect value in return.
As Stephanie Liu at Forrester Research notes, “Many consumers are willing to volunteer zero-party data in exchange for something valuable such as loyalty points or exclusive offers”.
What is First-Party Data?
First-party data refers to information collected directly from your audience through your owned channels and platforms. This includes:
- Website analytics and user behavior
- Purchase history
- Email subscription and engagement metrics
- Customer service interactions
- Mobile app usage data
Unlike third-party data (collected by external companies) or second-party data (another company’s first-party data), first-party data comes from direct interactions between your business and your customers.
Collecting zero-party data collection builds trust with your customers through transparency. The Zero-Party Data Revolution report found 50% of UK consumers trust brands that collect zero-party data, which involves willingly sharing information, over passive methods like cookies.
The same report also discovered 48% of respondents preferred interactive surveys as their preferred method for brands to capture their data.
When you collect information directly from customers, you can be confident in its reliability, leading to more informed marketing decisions.
The Business Case for Shifting Focus to Email
When comparing marketing channels, email marketing comes out significantly ahead in terms of initial costs. Unlike paid advertising, email marketing requires a smaller upfront investment in software and content creation.
As your business grows, your CRM becomes an increasingly valuable asset. Unlike paid advertising where costs typically scale linearly (or worse) with growth, email marketing often becomes more cost-effective as your audience expands.
Finally, a key focus of email marketing is nurturing relationships with existing customers, increasing their lifetime value. While paid advertising might be effective at acquiring new customers, email marketing turns one-time buyers into loyal advocates.
The Future of Marketing is Owned, Not Rented
As the marketing landscape continues its shift toward privacy and authenticity, zero and first-party data strategies are increasingly vital for businesses. Brands need to recognise email marketing not as a siloed channel, but as the central nervous system of customer engagement.
By cultivating rich first-party data assets and gaining transparent zero-party data through an honest exchange with your customers and prospects, businesses can achieve the elusive trifecta of marketing success: reduced costs, enhanced compliance, and superior customer experiences.
The path forward is clear - invest in owned channels, respect consumer privacy and watch as your customer relationships transform into your most valuable competitive asset.
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